Oct. 26--The market for new homes suddenly appears to have entered a surprising slowdown, with September sales of newly built homes falling 11.5 percent, hitting the lowest monthly level since last November.
The sales were well below what economists were expecting because home sales had been growing at encouraging levels and giving consumers confidence to spend money.
Yet economists evaluating Monday's data from the Department of Commerce were perplexed by the sharp turn and wanted to see a few more months of data before making any conclusions.
"This report appears utterly baffling given the strength of the NAHB (National Association of Homebuilders) homebuilder index, now at a decade high," said Ian Shepherson, economist for Pantheon Macroeconomics, in a note to clients.
The homebuilders group has estimated that new home sales will total 580,000 this year.
In September, the Commerce Department said sales were at a seasonally adjusted annual rate of just 468,000, below the 549,000 economists were expecting.
Sales of new homes in the Midwest dropped 8.3 percent -- less than a sharp decline on the East Coast but more than the West Coast's more modest 6.7 percent decline.
gmarksjarvis@tribpub.com
